For more than a year, two companies have been working to join forces and become the largest casino operator in the country. It’s been a long, sometimes frustrating journey for Eldorado Resorts and Caesars Entertainment. Fortunately, it looks like this deal is nearly complete. New Jersey has officially approved the Eldorado-Caesars deal; the final green light needed for the companies to merge.
The champagne is flowing over in Nevada. Today, we’re going to look at what led to New Jersey’s approval. We’ll also discuss what still needs to be done for these companies to officially become one.
Timeline of the Eldorado Resorts-Caesars Merger
Eldorado Resorts has long been one of the most powerful casino companies in the United States. It’s grown considerably over the years and now owns property in many different states. Eldorado CEO Tom Reeg continued to tell the media he wanted to expand even further over the past few years.
In June of 2019, Reeg’s ambition became clear. News broke that Eldorado Resorts had agreed to purchase Caesars Entertainment for an incredible $17.3 billion. With the purchase, all of Caesars’ assets would become Eldorado’s.
It’s the largest merger between two casino companies in history. In order for the deal to go through, these companies needed approval from the various gambling commissions in the states they operate in. The FTC also needed to approve the deal to ensure this company does not form a monopoly.
Company officials immediately began working to gain these approvals. Many different properties needed to be sold. Eldorado and Caesars were doing what was required and the companies continued to receive the green light from different gaming commissions.
In late June, the FTC formally approved the Eldorado-Caesars deal. Only three more states needed to sign off on the deal for it to complete. Nevada gave a thumbs up and just a few days later, Indiana did the same. It then all came down to New Jersey’s commission.
This week, the last approval needed for this merger to go through was granted.
New Jersey Finally Agrees to Allow the Eldorado-Caesars Deal
It wasn’t a surprise to see states take so long to approve this deal. Once it’s complete, Eldorado-Caesars will become the country’s most powerful gaming company. Commissions want to do everything they can to ensure things are fair for the other casino companies operating in their territory.
New Jersey, in particular, was very slow to give the green light. It forced a number of property sales in Atlantic City. Commission officials met on many occasions to discuss the impact that this merge will have on the state’s casino industry.
Last week, members of this commission met for a final time in Las Vegas. Here, officials within Eldorado Resorts and Caesars explained how things will remain competitive for all other casinos in Atlantic City. It seems their efforts have finally paid off. The commission officially gave these companies its approval.
Commissioner Alisa Cooper made sure to stress that “The stakes could not be any higher” once these companies come together. Ultimately, she and other commission members felt confident that the newly-merged company would not concentrate too much of the local gambling economy.
With New Jersey’s approval of the Eldorado-Caesars deal, things are now close to being finalized. This merger is expected to finish in the next few days. A few more papers need to be signed, yet all the hard work is now done in getting the deal done.
Will This Deal End Up Paying Off for Eldorado Resorts?
When Tom Reeg first agreed to purchase Caesars Entertainment, he likely had a much different idea of what this week would look like. At the start of 2020, the casino industry was surging and most felt things would continue on that path for years to come. In just a few months, the country’s land-based gambling industry was turned on its head.
Casinos around the country have begun to reopen. Some have since had to close down due to a spike in Covid-19 cases. Many casino companies are now being forced to lay off thousands of their workers.
It’s clear that the casino industry is in a tough place. New Jersey’s gaming revenue was 66% lower in June of this year than it was in 2020. It’s important to note that casinos had not opened here until July, though. Most analysts predict that casino revenue will continue to be significantly lower this year, even after casino markets reopen.
Eldorado paid $17.3 billion to acquire Caesars. Company officials likely hoped that this money would immediately begin flowing back in from its new properties. That may not necessarily be the case right now.
No one can really say how things will look in the future. It’s hard to imagine the land-based casino industry never recovering. We’re in strange times, however, and it could be years before casinos truly get back to the levels they were at last year.
With New Jersey’s approval, the Eldorado-Caesars deal can finally conclude. Now, the focus for this new casino giant will be increasing its revenue flow. Stay tuned for updates over the next few weeks.